Posted by: David Kiley on October 14, 2008
I thought I would weigh in with a handful of things that my family has done in the last few weeks as we brace for what feels like a prolonged period of poor returns on our investments. Anyone out there want to chime in with what they have done?
1. Cancelled delivery on a new car that we wanted, but do not need right now.
2. Had an energy audit, resulting in a series of measures that will hopefully keep out energy bills lower this winter.
3. Put off buying an expensive rug.
4. Reduced shopping at Whole Foods.
5. Dramatically cut back going out to eat dinner to about once every three weeks.
On the other side of the coin…
1. We are sending more money to our son’s 529 plan to help make up for the stinging 20% loss last quarter.
2. Sending more to the church food program for needy people in the community.
3. Doubling down on our efforts to buy from local Michigan businesses—independent hardware stores instead of Home Depot; a locally owned garden center; Meijers and Plum Markets instead of chains based out of state; local indi toy and gift shops instead of Toys R Us and the like.
There is no question that families are cutting back. Our canvas of Starbucks Nation showed that.
What seems at odds to me is the notion that we need economic stimulus packages to get us spending again.
One of the reasons, it seems to me, that this may be a prolonged Recession, is that perhaps families are realizing that that their own security depends on saving more and spending less. Maybe, we are finally there.
Whoever wins the election John McCain or Barack Obama, it would be nice to see the next president to use the bully pulpit repeatedly..not just once or twice…to encourage people to save more money, rather than spending it. Businesses, of course, don’t want to hear a President say…don’t spend.
Example: There is no reasoon why most people should flip their cars every three years unless they are leasing. Cars today are better than ever in terms of quality. Vehicles are engineered to last 125,000 miles to 175,000 miles today, though a lot of people are used to the old idea that a vehicle is “done” at 100,000 miles.
This feels like the ultimate economic “eat your peas” moment of the new century.